Morrison gets party backing for brakes on Ausgrid sale

Scott Morrison has gained support for a firm line on foreign investment as Coalition MPs back his concern about national security.

Scott Morrison has gained support for a firm line on foreign investment as Coalition MPs back his concern about national security factors in the mammoth Chinese bids for Australia’s most valuable electricity network.

The support clears ground for the Treasurer to reject foreign bids for 50.4 per cent of Ausgrid if he is warned of any risk to the national interest, with MPs saying they agreed with the priority on security.

China’s state-owned State Grid is under scrutiny over the deal as Senate crossbenchers, including Nick Xenophon and Pauline Hanson, express concern about the foreign ownership of a vital asset. Authorities are also vetting a bid from Cheung Kong Infrastructure Holding, a Hong Kong company controlled by billionaire Li Ka-shing.

MPs privately said they did not expect any blowback in the partyroom if Chinese bids were rejected, with the national interest concerns taking priority over the Liberal Party’s traditional reluctance to put curbs on investment.

Others said publicly that Mr Morrison was right to name national security as a key factor in his decision, which he said on Sunday was “not too far away” and would be informed “very extensively” by security issues.

Western Sydney MP Craig Kelly said there were good grounds for taking a “second look” at a company ultimately owned by the Chinese state.

“Extra consideration should be given to assets of strategic significance being owned by a government entity of a foreign country,” Mr Kelly said.

However, he warned that rejecting one bidder could lower the price, reducing the money raised for state infrastructure.

“What roads do we do without? Does it mean a new hospital wing does not get built? There is a cost ... from accepting a lower bid,” he said.

NSW Liberal MP David Coleman, who chairs the House of Representatives economics committee, said the government would be negligent if it did not look at security. “That’s standard procedure and it’s entirely appropriate for those matters to be taken into account,” he said.

Some MPs were cautious about putting a view.

“I think everyone should calm down and just wait for the process to finalise,” said incoming Liberal MP Jason Falinski, who has replaced Bronwyn Bishop in Mackellar on Sydney’s northern beaches.

“We have pretty stringent controls and regulations in Australia around foreign investment and while it may not appear that way, any investment by a foreign entity in something like Ausgrid (has) to go through a lot of hoops.

“Obviously, before there’s any investment by anyone, not just a Chinese company, you have to clear national security regulations and concerns. And people need to be satisfied that our national security won’t be diminished.”

Mr Falinski said he had a preference for whichever bid would pay the most, given the proceeds would go to transport and other infrastructure.